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Monday, 31 January 2022

It’s a bad time for IPOs everywhere but KSA + Energy firms can’t stop drilling

Not a good time for IPOs? The prospect of interest rate hikes, slowing economic growth and geopolitical tensions have rattled stocks globally — and companies are pulling their listings as a result, Bloomberg reports. The total value of global IPOs since the start of the year has fallen 60% y-o-y, while at least nine IPOs have been called off in New York alone. And it’s just as bad for SPACs, with USD 4 bn worth of blank-check firms scrapping their listings in January. Investors are less game for big-ticket tech listings as they flock to cheaper stocks, shifting market sentiment significantly from the growth stock frenzy of 2021.

Unless you’re a Saudi company: Two KSA companies have priced their upcoming IPOs at the top end of their target range, signaling a continued boom in demand for share sales in the kingdom as its benchmark index flourishes, according to Bloomberg. Digital security firm Elm expects to raise USD 820 mn in its listing, while Scientific and Medical Equipment House could raise USD 83 mn. Elm’s IPO could see the kingdom’s sovereign wealth fund rake in USD 5 bn in just three months, following its bn-USD listings of stakes in Saudi Telecom and the Tadawul itself, Bloomberg notes. And there’s more to come: Saudi’s listing pipeline is “deeper than ever,” bourse CEO Khalid al Hussan has said.

We don’t need new wells — but energy firms keep drilling: Oil supermajors are continuing to explore for hydrocarbons despite mounting pressure to transition to green energy, the Financial Times reports. Last May, the International Energy Agency said that no more exploration is required if we are to cut oil and gas consumption enough to reach net zero global emissions by 2050. Nonetheless, energy giants continue to drill — they just don’t advertise it like they used to, one energy consultant told the FT.

And we’re no exception: Countries with reserves of both oil and natural gas — including Egypt — are a popular choice for new drilling, the pink paper says, as energy execs wager that demand for gas will outlast that for oil. Egypt is preparing to launch a new oil and gas exploration bid round this year, after awarding seven companies licenses in its 2021 tender.




-0.4% (YTD: -4.1%)



Buy 15.66

Sell 15.76



Buy 15.66

Sell 15.76


Interest rates CBE

8.25% deposit

9.25% lending




+0.7% (YTD: +8.7%)




+0.4% (YTD: +3.3%)




+1.0% (YTD: +0.8%)


S&P 500


+2.4% (YTD: -7.0%)


FTSE 100


-1.2% (YTD: +1.1%)


Brent crude

USD 90.03



Natural gas (Nymex)

USD 4.64




USD 1,787




USD 37,746

-1.8% (as of midnight)


The EGX30 fell 0.4% yesterday on turnover of EGP 446 mn (60.2% below the 90-day average). Regional investors were net buyers. The index is down 4.1% YTD.

In the green: Ezz Steel (+1.1%), AMOC (+0.8%) and Orascom Development Egypt (+0.8%).

In the red: TMG Holding (-3.2%), Pioneers Properties (-2.4%) and GB Auto (-2.3%).

Asian markets are mixed this morning, with shares down in Australia and Shanghai but up in Hong Kong and Tokyo. The market in Seoul is closed for Lunar New Year’s Eve. Futures suggest shares in much of Europe will open in the green on this first trading day of the week, with Paris’ CAC 40 being the sole outlier. Futures point to a (weak) open in the green on Wall Street later today.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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